What is the advantage of the first movement?

The advantage of the first movement, or FMA, is the advantage of the first company in a completely new segment of the market. The advantage of first movement sometimes provides a company an advantage that can be difficult or even impossible for other market participants. The first company in the market segment can often take control of sources that subsequent participants may not be able to duplicate. The first mover on the market can sometimes create obstacles to entry that make it difficult for new competitors to enter the market.

The advantage of the first movement is the most obvious when a large company on the market first on the market, because a small company may not be able to expand fast enough to make an advantage. If a small company is unable to take advantage of the first movement, a larger company may appear and compete where a small society could not, thus enjoying what is known as the advantage of second movement. The first major participant on the market usually enjoys large prof. Is margins and the benefits of monopoly as long as the subsequent societyIt does not enter the market and will not create a competitive atmosphere. Depending on the product and industry, it may be some time before competitors can enter the market, making the advantage of the first turn significant.

Since the cost of the first company that enters the market may be significant, the company must carefully consider the costs and benefits of the first benefits of the tractor. The company will benefit from careful analysis of its strategic management to determine whether the benefits associated with the advantage of the first move outweigh the costs. The company will have to consider the cost of creating a new market segment and potential market size as well as prospects for competition.

The first driver must be able to generate or earn on a network effect to help the product category, and in the extension, its own product, get on the market. The network effect concerns the concept that the more users are a new product or service, the more valuable it isfor all these users. A classic example of a network effect is the phone. The more people have phones, the more valuable they are for anyone who has. Creating a value for a product users by expanding the market through a network effect increases the advantage of first movement.